At the same time, VW will create 2,000 new software jobs, as well as electronics positions in technical development, it said.
Ralf Brandstätter, Volkswagen's chief operating officer, said that the company needed to "do more to meet the challenges" the company is facing in the upcoming years, adding that the changes would make Volkswagen "fit for the electric and digital era".
The big carmaker's electric transition is driven by the need to conform to strict emissions limits on greenhouse gas carbon dioxide (CO2), set to bite in the European Union from 2020.
The Volkswagen I.D. will be a hatchback built on the company's "MEB" modular electric vehicle platform.
Besides plans to shrink its workforce, the VW passenger auto brand also targets to raise productivity and achieve €5.9 billion ($6.6 billion) worth of annual savings from 2023 in a bid to increase the operating margin to 6 percent.
Djokovic, Nishikori, Halep ousted at Indian Wells
Instead, the victory marked Kohlschreiber's first win over a No. 1 player and he will meet Gael Monfils in the fourth round. He will play 19-year-old Canadian Denis Shapovalov , the 24th seed who beat 10th-seeded Croatian Marin Cilic 6-4, 6-2.